The case arose because the UFU and the CFA had negotiated an enterprise agreement to govern working conditions in the CFA. Central to the agreement was a commitment by the CFA ‘to employ 342 career firefighters over a six year period and to conduct a minimum of three recruitment courses in each year training at least 30 recruits each’ ([2]). The CFA did not comply with that obligation so the Union raised the matter as an industrial dispute, and there was further agreement about staff recruitment which again, the CFA failed to honour ([3]).

The CFA did not offer the Court any cogent explanation for its failure to conduct the recruitment courses as it had agreed, or for its failure to train the number of recruit firefighters as it had agreed. ([6]).

The UFU commenced proceedings to force the CFA to comply with the enterprise agreement. Notwithstanding this was a negotiated agreement, the CFA had an ‘apparent about face’ ([6]) and argued that it was not bound by the agreement or the obligation to employ more staff. The Court, in part, agreed, and that raises the constitutional issues.

In that original case the trial judge found that the CFA was a trading corporation, which is relevant because the Commonwealth can make laws with respect to ‘Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth’ (Australian Constitution, s 51(xx)). Even so the trial judge found that the enterprise agreement could not be enforced as it infringed the Melbourne Principle, that is a principle that the Commonwealth could not impose conditions upon a state that impinged the State’s capacity to act as a sovereign government, in particular:

… the government’s right to determine the number and identity of the persons whom it wishes to employ, the term of appointment of such persons and, as well, the number and identity of the persons whom it wishes to dismiss with or without notice from its employment on redundancy grounds. An impairment of a State’s rights in these respects would, in our view, constitute an infringement of the implied limitation.

The terms of this agreement, according to the trial judge, did infringe Victoria’s rights to determine the number of employees and could not be enforced by the Commonwealth under the Fair Work Act 2009 (Cth).

All the parties appealed to the Full Federal Court, the CFA arguing that the trial judge was wrong to find that the CFA was a trading corporation, the UFU arguing the judge was wrong to find the Melbourne Principle applied and various claims by the CFA that were described (at [216]) as ‘a tit-for-tat manoeuvre having no particular strategic end beyond seeking to reduce the role of the UFU under the Agreement’.

The Full Federal Court handed down its decision in United Firefighters’ Union of Australia v Country Fire Authority [2015] FCAFC 1 on 8 January 2015.

The CFA is a trading corporation

The Full Federal Court (Perram, Robertson and Griffiths JJ) agreed with the trial judge’s assessment that the CFA was a trading corporation even though it is a statutory authority established for a public good. In essence the Full Federal Court went through all the arguments and the judge’s reasoning and found that the judge had made no mistakes. Rather than repeat the arguments and conclusions interested readers can read my summary of the trial judge’s findings in my original post – of United Firefighters Union of Australia (‘UFU’) v Country Fire Authority (‘CFA’) [2014] FCA 17 (February 12, 2014).

The Melbourne Principle

Where the Full Federal Court disagreed with the trial judge was on the application of the Melbourne Principle. The judges of the Full Court were of the view that the principle was a restriction that limited the ability of the Commonwealth to make laws or orders that restricted the sovereign rights of the States but did not apply where the states voluntarily agreed to those restrictions. In this case the CFA entered into a voluntary agreement with the UFU and enforcing that agreement did not infringe the principle.

The other issues were technical and as described by the judges, with no particular strategic end. They were not successful and I won’t report them in detail.

Conclusion

The court did not make final orders but required the parties to go away and draw up orders that reflected the court’s reasoning so the exact outcome is not known but the essence is that the CFA will be expected to honour the agreement it entered into. This is reassuring as it does at require an organisation such as the CFA to take seriously the agreements it enters, rather than enter them, presumably in good faith or at least with the other side expecting that it’s in good faith, and then try to argue that the agreement they entered cannot be enforced against them. Regardless of the legal merits, such an approach is unsavoury. Here the Full Federal Court has found that the law does not allow the CFA a way to avoid the agreement it had voluntarily entered into.